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Every time you use your credit card, the bank is earning swipe fees from the merchant. It’s these swipe fees plus other ways that banks profit off credit cards–interest fees, late fees, advertising to cardholders–that pay for the perks we get from credit cards.

How much of these fees are rebated to us? According to a recent article in The Economist:

[C]ard issuers are providing bigger rebates on purchases, more frequent-flyer miles as a sign-up bonus and longer interest-free periods for those who transfer balances from other cards. Mercator Advisory Group, a consultancy, estimates that the amount of revenue from each transaction passed back to the customer has been growing for years. In 2012 it put it at 47% for three of the biggest issuers, up from 39% in 2010.

According to the Mercator Advisory Group (according to The Economist) we got back 47% of the revenue from each transaction three years ago. Unfortunately I couldn’t find the underlying study or press release anywhere online by googling all the relevant keywords. If you can, please post a link in the comments.

I get back a lot more than 47% of the swipe fees the bank collects on me. So much of my spending is going toward clearing sign up bonuses and maximizing category bonuses, that I definitely average more than 3 miles per dollar across all my spending. Even assuming credit card companies can buy miles for 1 cent each (I don’t think they get them that cheaply), that works out to costing credit card companies at least 3% of my purchases in rewards. There’s no way they are making that back off swipe fees (or any other fees, since I don’t ever pay interest.)

Of course, there’s nothing average about the way I approach credit cards.

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One other interesting chart from the article:

Screen Shot 2015-03-03 at 4.52.28 PM
from The Economist

 

Ignore the red line and focus on the blue bars, which show that the average bonus miles offered on new cards rose from about 9,000 in 2011 to about 14,000 in 2015.

What? Huh? What?

The only time I see an airline card with such a putrid bonus is the 10,000 mile offer on the JetBlue card. Every other airline card offers 25,000, 30,000, 40,000, or 50,000 miles (like on the American Airlines card at the moment.) And sometimes airline bonuses hit as high as 100,000 miles like on the American Airlines Executive card last year.

The only possible way to get such tiny averages (9,000 and 14,000) is if the calculation includes all credit cards, many of which come with zero bonus. That’s a weird way to construct the average: averaging in a bunch of zeros.

Bottom line: it’s always fascinating for me to read the mainstream media on credit cards and miles because, on the one hand, they have better access to certain data and can do more research, and on the other hand, they don’t get it.

 

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Are you sick of missing out on mistake fares, mistake rates on hotels, and other limited-time offers that you didn’t hear about in time?

Here’s the brand new solution:

I’ve created a new Twitter account, @MileValueAlerts, that I’ll only use for huge deals you need to know about right now before it’s too late. The account is designed to be subscribed to by SMS, so on the rare occasions I use the account, you get a text message instantly.

You’ll never miss another mistake fare.

How rarely will I tweet from the account? Here are the four most recent tweets I think I would have made.

That’s four tweets in the last two months.

Because I will almost never tweet from the account, you can safely set up your Twitter account to send you a text message when I do post without fear of getting many text messages.

(I will continue to post multiple times per day on the normal @MileValue twitter account, including mistake fares as they arise, but @MileValueAlerts will be dedicated to mistake fares and the impending demise of similar offers.)

How to Set Up Your Twitter Account to Text You Every Time @MileValueAlerts Posts in Three Easy Steps

Step 1: Add your mobile number to your Twitter account

Click your image in the top right of any Twitter screen and select Settings.

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Select Mobile from the menu on the left.

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Add your number and confirm the code texted to you.Screen Shot 2015-02-19 at 5.01.50 PMStep 2: Turn on SMS Notifications

Under the exact same Mobile Settings tab you went to in Step 1, look for the area labeled “Text Notifications.” Check the box for “Tweets from people you’ve enabled for mobile notifications.”

Step 3: Add @MileValueAlerts Alerts

Go to @MileValueAlerts Twitter page. Follow it. Next to the button that says Following, click the gear icon and select “Turn on mobile notifications.”

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Now you’re set up to receive a text message every time @MileValueAlerts tweets. You can, of course, follow the same process to add other accounts for text message alerts, but I personally don’t want to get a text every time any regular Twitter user tweets.

Bottom Line

I used to be super bummed when I’d miss a mistake fare. Now you won’t have to miss any more. You won’t need to be by Twitter or on a blog when a deal blows up. You’ll just need to be with your phone (and who isn’t chained to that?)

The second I tweet the deal from my brand new account @MileValueAlerts, you will be texted. Sign up for text message alerts from @MileValueAlerts with confidence. I will only use the account for the biggest deals you need to know about right now because their death seems imminent.

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Meeting the minimum spending requirement on the Arrival Plus give you about $500 worth of free flights on any airline with no blackouts.

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Last month, the new design of milevalue.com went live, and I walked through some of the changes in “MileValue Looks Different.”

The team behind the design was Third Harbor, specifically Tyler and Emily.

Tyler has a lot of experience in the field, but this specific company is new, and he was too busy working on several client projects to get his own website up until now. This is how Tyler explained to me what Third Harbor is:

My new company is called ‘Third Harbor’ (http://www.thirdharbor.com). We help non-technical founders plan, develop, and launch technical projects, apps, companies, and websites. Our work largely falls into three categories: design and development, Minimum Viable Product creation, and web presence management.

In addition to our roles as designers and developers, we also function much like a film producer. We manage the needs of each project as they arise, and save our clients the trouble of finding, vetting, and managing individual contractors.

That’s me. A non-technical founder.

I’m putting this post out to get as free advertisement for Third Harbor because I am happy with their work.

I’m happy with how MileValue looks, really happy with the level of responsiveness during the planning stages, transition, and putting out post-transition fires. I definitely recommend Third Harbor to anyone.

Tyler and I started with my ideas, and he figured out how to implement them. Third Harbor can do the same for you.

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I looked back on my 2014 travels on New Year’s Eve, and I want to share my 2015 travel goals today. More importantly, I want to explain how you can turn your 2015 travel goals into reality by taking the first baby steps toward your dream trip today.

My Plan

I have a general idea that I am in the middle of about a nine month trip that will follow summer from South America to Europe.

Right now I am in Chile, trekking Torres del Paine. In a few days, I’ll move on to El Calafate and El Chalten, Argentina before ending my Patagonia trip with a flight back to Buenos Aires.

I expect to stay in Buenos Aires until mid-March when I will head to the United States to follow the University of Virginia’s basketball team through the ACC and NCAA tournaments. I did this last year, and it was so much fun that I couldn’t pass up the chance to do it again. In between games, I like to visit friends and family around the east coast.

In early April, I want to head to Sevilla, Spain for one month (possibly with some A380 First Class flying and a stop in the Middle East along the way.)

I don’t have this next part totally worked out, but I think I want to live one month in a city in the Balkans and then one month in a city in the Baltics, possibly with some travel in those regions in between. I will need to be mindful of spending less than three months in the Schengen Area, though that shouldn’t be too hard since most of the Balkans are outside the Schengen Area. It is nice that the euro is down to $1.22, which is the lowest it has been in years.

This plan puts me in Europe until July or so, at which point I will probably return to the United States, but that’s so many months and countries away that my foresight is getting very blurry.

Here’s my best guess for countries I will hit in 2015. It’s fewer than in years past with nothing east of the United Arab Emirates in mind.

Screen Shot 2014-12-29 at 9.25.35 PM
from amcharts.com

How You Can Reach Your Travel Goals in 2015

  1. Pick a place you’d like to travel to in July 2015 or later (so you have time to amass miles), who you want to go with, what cabin you want to fly, and what lodging you want.
  2. Fill out my Free Credit Card Consultation Form, so I can help you collect the right miles for your goal or let you know the goal is unattainable. If instead you collect miles at random, you will probably collect the wrong miles for the job.
  3. While you are collecting miles, read MileValue posts on how to use the miles you’re collecting. Start with the posts on the basics of all the major programs in the Free First Class Next Month beginners series.
  4. Once the miles post, book your dream trip.
  5. Or skip steps 3 and 4, and hire the MileValue Award Booking Service when your miles post.

Your Turn

In the comments, share your travel goals for 2015 to put yourself on record (just stating a goal makes you more likely to accomplish it) and to inspire us. I’m not above stealing good ideas, so if your plans sound better than mine, I just might change my plans.

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2014 was a great year of travel for me, and hopefully for you too.

Last year (2013) was a year of deep and broad travel since I spent almost six months in Argentina and another two months flying through 21 total countries. I spent over nine months outside the United States

This year (2014) was focused on three main trips with much more time spent at my home base on Oahu:

  1. Fly the best First Classes / see SE Asia / follow UVA basketball through the ACC and NCAA tournaments.
  2. World Cup
  3. Start of a nine month trip to follow Summer through South America and Europe (next summer.)

COUNTRIES VISITED (14)

Screen Shot 2014-12-29 at 9.21.38 PM
from amcharts.com

In chronological order (excluding countries where I never left the airport):

  • United States (9 months; Hawaii: 7.5 months; mainland: 1.5 months)
  • Macau (1 day)
  • Singapore (4 days)
  • Cambodia (8 days)
  • United Kingdom (2 days)
  • Slovenia (4 days)
  • Brazil (10 days)
  • Hong Kong (4 days)
  • China (3 days)
  • South Korea (5 days)
  • North Korea (2 minutes)
  • Colombia (28 days)
  • Argentina (24 days)
  • Chile (5 days)

All of these countries were new except the United States, United Kingdom, and Argentina. My total is now 55 (counting England, Wales, Macau, Hong Kong, and China separately):

Screen Shot 2014-12-29 at 9.19.07 PM

PREMIUM AIRLINE CABINS FLOWN (12)

In chronological order (with links to trip reports):

Unfortunately six of these premium cabins were the front of United planes, which are comfortable but not exactly luxurious.

My favorite flights were in Cathay Pacific First Class and Asiana First Class.

MILES FLOWN (88,392)

  • 88,392 miles flown over 45 segments
  • If I had flown all these as paid flights on one airline like United or American, I wouldn’t even have top tier status!
  • Longest flight: JFK to Hong Kong in Cathay Pacific First Class (8,072 miles)
  • Shortest flight: Honolulu to Kahului, Maui (100 miles)
  • Favorite flight: JFK to Hong Kong in Cathay Pacific First Class. 16 hours wasn’t long enough
  • Runner up: Puerto Williams to Punta Arenas, Chile in the front row over the mountains, fjords, and oceans of Patagonia with a view of the cockpit

Screen Shot 2014-12-27 at 10.16.38 AM

 

FAVORITE MOMENTS OF TRAVEL

  • Biking the walls of Angkor Thom in Cambodia.
  • Jumping into the FREEZING cold Beagle Channel in Puerto Williams, Chile
  • Trekking 4 days in Torres del Paine National Park, Chile
  • Watching the last few minutes of the United States loss to Belgium in the World Cup as we mounted a frantic comeback surrounded by Americans and Brazilians at the FIFA Fan Zone in Sao Paulo.
  • Playing two USTA National Championship tournaments in Palm Springs, CA and Tucson, AZ with great friends from Hawaii.
  • Celebrating at the Obelisk in downtown Buenos Aires when River Plate won the Copa Sudamericana soccer tournament.
  • Being at all three UVA games at the first ACC tournament we’ve won since 1976. Being at all three NCAA tournament games including the Sweet 16 loss at Madison Square Garden with my brother.
  • Haircuts and a shave in Medellin, Colombia and the Indian section of Singapore.
  • Cliff jumping from 30 feet at several spots on Oahu and Maui.
  • Flying a friend to Oahu and Maui with Avios to spend a week together.
  • The nightlife-turning-into-daylife in Sao Paulo, Rio, Bogota, Medellin, and Buenos Aires.
  • Hiking the Great Wall of China with my brother.
  • A bike tour of rural livelihoods in Battambang, Cambodia.
  • The DMZ between North and South Korea.
  • Hiking to Sai Wan in Hong Kong and discovering a beautiful beach and natural pool.
  • Meeting new friends along the way.
  • Reconnecting with old friends from previous trips.
  • Visiting family.

Upon reading the list, I’m struck by how idiosyncratic my favorite moments were. Surely most of my readers wouldn’t have enjoyed many of my favorite moments. What’s great about miles is that they work for you to make your dream trips happen. They are not one size fits all. We can all be a part of the same community even though we have wildly different travel styles and goals.

What were your travel stats for 2014? More importantly, what were your best travel memories from this year?

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Merry Christmas from Ushuaia, Argentina.

Screen Shot 2014-12-25 at 12.47.29 AM
from Google Maps, not too far from Antarctica

I just had the pleasure of delivering presents at midnight in full Papá Noel (Santa Claus) suit to the hostel owners’ excited 1-10 year old kids. I should have pictures soon, but I was too busy ho-ho-hoing to snap any. I hope your Christmas is as fun as that.

As I did for Thanksgiving, I’ll take off until Sunday because who reads about miles and points during their 5-6 day weekend? Here are some recent interesting posts if you want to brush up on anything you have missed.

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The Washington Post has an interesting poll running right now. It’s really just one question about what you call the commercial airport closest to DC.

Screen Shot 2014-12-15 at 12.06.06 PM

Beneath that, there are several demographic questions that I’m sure they’ll try to correlate your answer like how old you are, where you grew up, and how often you fly out of that airport that we’re trying to figure out what to call.

Screen Shot 2014-12-15 at 12.06.16 PM

I grew up in Fredericksburg, VA, which is about equidistant from said airport, Dulles, and Richmond International Airport. I mainly have flown out of Dulles because it’s a United hub and because I have cousins just a few minutes from the airport.

I answered that I call the other airport “National.” I’m fairly consistent about that though if I’m writing to an audience that knows the airports, I’ll usually write “DCA.”

What do you call that other airport in Northern Virginia that isn’t Dulles?

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I gave a well-received presentation on Trick Awards at the Chicago Seminars in October.

The presentation dealt with free one ways, negative price one ways, open jaws, stopovers, avoiding fuel surcharges, and award chart SUPER sweet spots.

Enjoy!

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In October, I had the pleasure of speaking at the Chicago Seminars. My original slot was to speak about Trick Awards, but a last minute cancellation by another speaker had me also speak about the Southwest Companion Pass.

Here are my slides from the presentation, which are another way to consume the information in this post: Southwest 50k Offers Are Back, Leverage Them for $3,142 in Free Flights.

The presentation also contains some of my best tips about Southwest like how to snag the best seats, when Southwest’s ticket prices go up (this is pretty regular in my experience, and much more.

Also see Free Giveaway: $51 Southwest Gift Card.

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After 2.5 years, I finally spruced the place up a little bit. Thanks to Million Mile Secrets for letting me steal his theme for a few years, but now I’ve got my own. ;)

Almost all the changes are cosmetic. Let me walk you through a few of them.

First, you probably noticed that you got a pop up when you came to the site today. Sorry for the minor annoyance. I just really want people to sign up to receive one free daily email every morning with all of the day’s posts! You will see this pop up no more than once per month.

Next, the home page has seen a total redesign.

Screen Shot 2014-12-11 at 3.20.18 AM

For anyone who stumbled onto the site not knowing where they are, we’ve added a prominent button to Start Here. Underneath it, I’ve added a few of the top credit card offers. Before they lined the sides of the page, but I don’t want people to confuse them with randomly generated ads. These are handpicked offers.

Next comes all the posts. I wanted to fit a lot more posts onto the home page, so great content that’s only a week old isn’t hard to find.

Post pages look a little different than before, and offer you the chance to share a post you think your friends will find helpful with just the click of a button at the bottom of the page.

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The key services of this site: the blog, the Award Booking Service, and the Free Credit Card Consultation remain the same.

Hopefully you like the makeover. Big shoutout to Tyler and Emily for the design work. For anyone who has a website, I’ll give a little more info on their company in a few days. They’ve worked so hard on my site that they haven’t finished their own!

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An interview with me is currently featured at HotelsCheap.org. Excerpt:

What are the disadvantages of using [credit cards to earn miles]?

There are none if you are responsible.

If you are irresponsible with credit cards, don’t get them. There are two main ways to be irresponsible with credit cards.

1. You don’t pay the monthly balance in full. If you run a balance at 20 percent interest, any rewards will be quickly swamped. Just set your cards to be auto-paid from your checking account each month to avoid this.

2. You spend more with plastic than with paper. If you know you spend less with cash, don’t get credit cards because any rewards will be quickly swamped.

Check out the full thing here.

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Happy Thanksgiving, everyone!

This year, just like the last two Thanksgivings, I am thankful for my readers. Without you, I might be in an office somewhere.

I will spend this Thanksgiving in Medellin, Colombia. Amazingly, I think it’s my first Thanksgiving abroad.

Thanksgiving is my absolute favorite holiday. My normal routine is to spend it in Virginia with my extended family. The cooks always say dinner will be at 2 PM, but it’s more like 4 PM. I don’t mind; it just gives me more time to get hungry. Once we all say what we’re thankful for, I load up one plate with a few pounds of turkey, mashed potatoes, gravy, stuffing, and rolls–maybe some peas or Brussels sprouts too. I finish it as the last of my family are just preparing their plates, and then I have an even bigger portion of seconds. I skip dessert temporarily, and head straight to the nearest bed for a two hour nap. Then I wake up and sample the pies.

This year though I’ll be headed to an Irish Pub for a plate of traditional Thanksgiving fare. The American owner is very excited about the preparations he’s made, and I’d hate to miss out on the food, football, and camaraderie that make Thursday special.

I notice a pronounced drop in traffic to MileValue each Thanksgiving, so I’ll take a few days off from posting to enjoy Medellin, plan my Patagonia trip, and recharge my blogging batteries. Expect the next new post on Sunday.

Until then, enjoy family, friends, food, Black Friday, and leftovers!

If you want to use some of your free time to brush up on miles, I’ve put some of my most popular posts from the last month after the “Continue Reading” button.

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I just appeared on the Rudy Maxa radio show to talk about United making it harder to achieve elite status by adding a separate spending requirement on United tickets in addition to miles flown, a requirement which came into effect this year and is increasing next year.

Screen Shot 2014-11-22 at 10.18.25 AM

Rudy asked how folks should adapt to this change, and I don’t think he expected such an easy answer.

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How this only has 3,000 views is beyond me!

A drone was allowed by Mexico City airport authorities and airline pilots to fly over the airport and film taxis, take offs, and landings from a perspective I’ve never seen before. It’s a fascinating three minutes.

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All 30 spots are full and there is a wait list for cancellations that is already 10+ deep, so no new RSVPs can be accepted. I love the great response, so I’ll try to have more.

I’m excited to announce a MileValue dinner this Sunday, September 21, in Los Angeles (90006) at 6 PM. I chose an earlier start time, since it’s a work night.

This is the first one in Los Angeles in eleven months, and I think the fourth LA dinner overall. I love the MileValue dinners in Los Angeles, which have had attendees from all over Southern California at all miles collecting and redeeming levels.

Full details and how to RSVP

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